The banking sector is one of the pillars of any country’s economy. So, it’s no wonder why finance students are interested in a career in commercial banking.
In a nutshell, a career in commercial banking can be gratifying. And there are many benefits involved, such as career growth potential and career path choices.
Working as a commercial banker could pave the way to other opportunities in the world of finance. You may even have the chance to grow into an executive role with enough experience.
Starting salaries in commercial banking are also above average. And let’s not forget that commercial banks continue to flourish because they play a pivotal role in society.
Let’s take a closer look at the realm of commercial banking and determine whether it offers a viable career path.
What is a Commercial Bank?
A commercial bank is a financial service provider through which loans, accounts, credit, mortgages and more can be obtained. These institutions are known for providing a vast array of banking services to corporate clients and individuals.
It’s customary for a commercial bank to have brick-and-mortar branches. But as is the case with most banks, they usually also provide a selection of services online.
Commercial banks are essentially the intermediary between those who supply funding and individuals or businesses that need financing.
These institutions make their money through interest charges on loans, mortgages, and lines of credit. They also charge fees for certain services, which adds to their revenue.
What is a Commercial Banker?
Now that we know what a commercial bank is let’s examine the role of a commercial banker.
There are different roles within the commercial banking environment. And each one deals with a different aspect of the financial services offered by the bank.
But general duties within commercial banking include:
- Mediating between customers and lenders
- Drawing up and initiating commercial loans
- Overseeing various commercial accounts
- Sourcing potential clients
- Providing expert financial guidance
- Dealing in cash management, lines of credit, syndicated facilities, and term loans
- Opening savings or checking accounts for customer deposits
- Assisting with the development of businesses
- Offering lending services to commercial clients
- Oversee client company cash flow and revenue
- Other specialized services
The Benefits of a Career Path in Commercial Banking
There are several benefits associated with a career in commercial banking. This is why there’s so much interest in working in this field.
Those who embark on a career in commercial banking can expect to enjoy salaries in a relatively high-income bracket. Roles in this field are known to provide great earning potential for university graduates majoring in finance.
According to PayScale, the average salary of a commercial banker is currently in the region of $91,000 per annum. This would be for someone who has 5 years or more experience in the industry.
The entry-level salary would obviously be less but is still considered an above-average income. And in commercial banking, you have the potential to double this starting salary after a few years of experience.
That said, your expected salary will be dependent on where you’re located. For instance, a credit analyst at a commercial bank will earn nearly 60% more in New York than they would in Chicago.
Opportunity to Grow
A career in commercial banking comes with immense growth potential. Factors such as your qualifications and experience will influence the path you take. But there are many rungs to climb on the commercial banking ladder as you hone your skills.
Whether the economy is good or bad, there will always be the need for a commercial bank. Corporations and individuals alike will always need funding, deposit accounts and credit facilities irrespective of the financial climate.
The fact is that commercial banks in the United States currently manage more than $15 trillion worth of assets. And this segment of the market is expanding with each year.
Commercial banks will exist long into the future. And this is one of the reasons that a career in commercial banking is a safe and viable choice.
Multiple Career Choices
We’ve mentioned the growth potential available to those following a commercial banking career path. But there are also numerous roles to consider within the sector. And this makes the industry attractive to those who would like to explore their options.
Your initial choices will be determined by the type of degree you’ve obtained. But from there, it’s possible to gain experience and grow into different roles as you find your preference.
Get to Help People
The financial and professional benefits of a career path in commercial banking are undoubtedly attractive. However, one must not forget about the need for fulfilment in what we do for a living.
A career in commercial banking can be enriching because, at the end of the day, you’re helping people and businesses. You’re providing them with much-needed funding and services to help them overcome challenges and grow.
Remembering this will give you a sense of achievement and satisfaction as you advance in the commercial banking field.
Opportunities for Women
Despite it being the 21st century, women remain somewhat absent in managerial and executive roles in the commercial banking sector. And there’s a desperate need for more women to join the ranks in this industry.
In fact, recent studies indicate that investors are more likely to respond to institutions that champion diversification. So, it’s likely we’ll see commercial banks searching for more talented women to be a part of their team.
The Treat of Technology
We’ve discussed some of the primary benefits of following a career path in commercial banking. But it’s only fair that we explore any pitfalls there might be before you commit.
Within the banking sector in general, many institutions are shifting toward a substantial web-based service offering.
There are, in fact, some banks and lenders that no longer have a physical location for customers to visit. All transactions and interactions take place online. And this offers a great deal of flexibility and convenience to the client.
This shift will continue as advances in technology are made. And, as a result, a significant percentage of commercial bank employees will no longer be working on location.
This by no means implies that commercial bankers will become obsolete. But it is something to consider as you pave the way for your career path in commercial banking.
Starting Your Career Path in Commercial Banking
When entering the commercial banking sector workplace, you’re likely to begin your career as a credit analyst.
However, if you’ve obtained an MBA, you might qualify for a loan officer or account manager position.
Your future career path in commercial banking will generally look something like this:
- Credit Analyst: They are responsible for evaluating a borrower’s level of risk and ability to repay the loan they’ve applied for.
- Account Manager: In this role, you would liaise with clients, manage customer accounts, and source new clients to bring on board.
- Branch Manager: This individual would oversee the staff and operations of a specific branch of a commercial bank.
- Quality Assurance Specialist: As a quality assurance specialist, you would be responsible for enforcing the bank’s policies and regulations. Your job would be to ensure that the best possible quality and standards are met at all times.
- Loan Officer: In this position, you would be the point of contact for the borrower. Guiding the customer through the loan process and providing advice regarding their options would be essential in this role.
- Executive: Becoming an executive in a commercial bank would be considered the pinnacle of your career path. Roles at this level include Managing Director, President, Vice President, and so on.
Through this article, we’ve determined that commercial banking is a good career path. The key is to ensure that you obtain a relevant degree in finance to kick off your career.
As you enter the field, you’ll enjoy a competitive salary and have several growth and career opportunities at your fingertips. And, with experience, you have the potential to increase your income considerably.
You must begin your career path in commercial banking with the right attitude. And remember that, while it may be a long road to travel, the journey will be educational and rewarding.